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| Version 4 | Version 5 |
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| Five-times-salary mortgage offer | Five-times-salary mortgage offer |
| (10 minutes later) | |
| Abbey, Britain's second largest home loan provider, is offering borrowers five times their salary in order to help them get onto the property ladder. | Abbey, Britain's second largest home loan provider, is offering borrowers five times their salary in order to help them get onto the property ladder. |
| The bank is making the offer available to individuals or couples with a 25% deposit for their house and an annual income of £50,000 or more. | The bank is making the offer available to individuals or couples with a 25% deposit for their house and an annual income of £50,000 or more. |
| Abbey said it was reacting to surging house prices. | Abbey said it was reacting to surging house prices. |
| But a leading credit counsellor warned that borrowing on this scale meant buyers could be "very stretched". | But a leading credit counsellor warned that borrowing on this scale meant buyers could be "very stretched". |
| An interest rate rise is also expected in the near future. | An interest rate rise is also expected in the near future. |
| Encourage | Encourage |
| In recent years there has been a clear trend towards higher multiples, in some cases as much as 7.5 times annual salary How much money can you borrow? | |
| A couple borrowing £250,000 with a shared annual income of £50,000 would face repayments of about £1,400 a month - £17,000 a year. | A couple borrowing £250,000 with a shared annual income of £50,000 would face repayments of about £1,400 a month - £17,000 a year. |
| However, only borrowers with good credit ratings and low debt levels would qualify, Abbey said. | However, only borrowers with good credit ratings and low debt levels would qualify, Abbey said. |
| "Our customers are continually asking for more money to purchase the house they want and subsequently we looked into the affordability ratings of certain people," said Abbey spokesman Dave Stewart. | "Our customers are continually asking for more money to purchase the house they want and subsequently we looked into the affordability ratings of certain people," said Abbey spokesman Dave Stewart. |
| "We found that people could afford to pay out for bigger mortgages but there just wasn't anything on the market at the moment offering them what they needed." | "We found that people could afford to pay out for bigger mortgages but there just wasn't anything on the market at the moment offering them what they needed." |
| The current industry standard is for homebuyers to be offered mortgages of up to three-and-a-half times their salary. | The current industry standard is for homebuyers to be offered mortgages of up to three-and-a-half times their salary. |
| Analysts say Abbey's move is likely to encourage other lenders to follow suit, as they fight for the business of would-be homeowners. | Analysts say Abbey's move is likely to encourage other lenders to follow suit, as they fight for the business of would-be homeowners. |
| Last week, Bank of Ireland Mortgages and Bristol & West increased their standard salary multiple allowances from 4 to 4.5. | Last week, Bank of Ireland Mortgages and Bristol & West increased their standard salary multiple allowances from 4 to 4.5. |
| 'Perfectly comfortable' | 'Perfectly comfortable' |
| The Bank of England is strongly tipped to raise interest rates by 0.25 percentage points to 5% next week. | The Bank of England is strongly tipped to raise interest rates by 0.25 percentage points to 5% next week. |
| The chief executive of the Consumer Credit Counselling Service, Malcolm Hurlston, told the BBC that Abbey's announcement was risky news for borrowers. | The chief executive of the Consumer Credit Counselling Service, Malcolm Hurlston, told the BBC that Abbey's announcement was risky news for borrowers. |
| "For some people this is going to look like an answer to their prayers but it risks taking them into dangerous territory," he said. | "For some people this is going to look like an answer to their prayers but it risks taking them into dangerous territory," he said. |
| "If their salaries do not go up in the way they think, then they are going to be very stretched." | "If their salaries do not go up in the way they think, then they are going to be very stretched." |
| However, Ray Boulger, senior technical manager at independent mortgage brokers John Charcol, said it was possible to get similar incremental loans from other lenders. | However, Ray Boulger, senior technical manager at independent mortgage brokers John Charcol, said it was possible to get similar incremental loans from other lenders. |
| "There is a responsibility on the borrower," he told BBC Radio Five Live. | "There is a responsibility on the borrower," he told BBC Radio Five Live. |
| "There will be some who feel perfectly comfortable borrowing that amount of money because they have a lifestyle which means they can afford it. | "There will be some who feel perfectly comfortable borrowing that amount of money because they have a lifestyle which means they can afford it. |
| "However, there are others who prefer to spend more on luxuries and for who it is not suitable." | "However, there are others who prefer to spend more on luxuries and for who it is not suitable." |